Illinois almost out of time to get $500 million

Feds would pay to create health insurance exchange

If state lawmakers don’t act soon, Illinois could miss out on hundreds of jobs and $500 million in federal dollars to establish a state health insurance marketplace.

As end of the spring legislative session approaches on May 31, the Illinois General Assembly is running out of time to implement a pillar of the federal insurance reforms known as “Obamacare.” If Illinois fails to pass legislation establishing a state health insurance marketplace by the end of session, the state may be disqualified from receiving several hundred million dollars in federal assistance grants.

Jim Duffet, executive director of the Illinois-based Campaign for Better Healthcare, says he’s optimistic that such legislation can pass if called for a vote. However, lawmakers are currently wrestling with more high-profile issues like budget appropriations and the expiration of the income tax increase.

A bill to create the insurance marketplace, also known as an “exchange,” already passed the Illinois Senate during the 2013 spring session. The Illinois House has yet to vote on the bill, but Duffet says his group counts between 63 and 66 potential “yes” votes in the House. He says 28 lawmakers in the House have signed a pledge to vote for the bill.  

“I’m not an advocate of using commitment forms because it’s weak, but we used it more to heighten and really lay out for legislators what would be the loss if we did not do this,” Duffet says.

The bill, HB3227, has essentially died, despite already being approved in the Senate. It started life in the House as an unrelated bill, but was amended in the Senate, which means the House has to approve the changes. The deadline for moving substantive bills through committee has already passed, meaning HB3227 has little chance of moving forward. However, the common practice of inserting language from stalled bills into empty “shell bills” means the legislation could be resurrected at any time under a different bill number.

“Nothing is dead in Springfield,” Duffet jokes.

If Illinois does create a state health insurance marketplace, it would be eligible to receive up to $500 million in federal grants to defray the startup costs. Duffet says once a marketplace is established, it would mean hundreds of new jobs associated with a new call center and consumer education and outreach.

The Illinois health insurance marketplace would be a state-run version of the federal health insurance exchange already in existence under the federal Patient Protection and Affordable Care Act of 2010. The exchange allows consumers to compare and purchase health insurance plans which meet basic standards of coverage and are offered by private companies. Illinois failed to create its own state-run exchange prior to the open enrollment period that spanned October 2013 through March 2014, so the state is currently in a partnership with the federal government.

That partnership will no longer be available in mid-2015, meaning that without its own exchange, Illinois will lose what little autonomy it currently has in making the marketplace its own. Without a state-run exchange, CBHC says Illinois can’t determine which plans appear for purchase or offer analysis about which plans are the greatest value. The state wouldn’t be able to impose any standards that plans must meet above what federal law requires, CBHC says, and any issues which may arise unique to Illinois wouldn’t be addressed unless the federal Department of Health and Human Services sees fit. Furthermore, if the U.S. Congress orders a change to the federal marketplace, Illinois consumers would be bound by that decision instead of simply using the state-run exchange.

Illinois lawmakers and state agencies met with insurers and consumer advocates for several months in the run-up to the launch of Obamacare, planning what a state-run exchange would look like. Much of the framework has already been laid, Duffet says, but there’s still the issue of how the exchange would be funded. Currently, the federal exchange charges insurers a 3.5 percent fee on each enrollee’s premium, a cost which is passed on to the consumer. Duffet says insurers should pay for the marketplace, given that they stand to profit greatly as more people purchase the health insurance that is required under the federal law.

Still, Duffet says issues like that can be ironed out later. What matters, he says, is that Illinois adopt legislation by Nov. 14, which is the deadline for accessing the federal funding. While that could happen during the General Assembly’s fall veto session, Duffet says it’s unlikely.

“The talk has been, ‘Jim, let’s wait until November,” Duffet said. “It’ll be safer for people after the election, but in my 30 years of dealing with legislation, you hear that every time. It needs to happen now.”

Contact Patrick Yeagle at

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